**SECURITIES AND EXCHANGE COMMISSION       Washington, D.C. 20549       FORM 10-QSB       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF       THE SECURITIES EXCHANGE ACT OF 1934       For the quarterly period ended****January 31, 2005**

| **000-29921**          |
|------------------------|
|                        |
| Commission file number |

|                                                                   |
|-------------------------------------------------------------------|
| **MAGIC MEDIA NETWORKS, INC.**                                    |
|                                                                   |
| (Exact name of small business issuer as specified in its charter) |

| **Delaware**             |   | **65-0494581**                       |
|--------------------------|--------|--------------------------------------|
|                          |   |                                      |
| (State of incorporation) |   | (IRS Employer Identification Number) |

| **530 North Federal Highway****Fort Lauderdale****,****Florida****33301** |
|---------------------------------------------------------------------------|
|                                                                           |
| (Address of principal executive office)                                   |

| **(954) 764-0579**          |
|-----------------------------|
|                             |
| (Issuer's telephone number) |

| **Check whether the issuer:**                                                                                                                                                                                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports)**Yes [X] No[ ]** |
| and                                                                                                                                                                                                                 |
| (2) has been subject to such filing requirements for the past 90 days.**Yes [X] No [ ]**                                                                                                                            |

|                                                                                                                                                          |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Applicable only to corporate issuers**                                                                                                                      |
| As of March 19, 2005 (the most recent practicable date), there were 31,690.412 shares of the issuer's Common Stock, $0.0001 par value per share, outstanding. |
| Transitional Small Business Disclosure Format (check one)**Yes [ ] No [X]**                                                                                   |

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| **MAGIC MEDIA NETWORKS, INC.                 FORM 10-QSB                 TABLE OF CONTENTS** |
|----------------------------------------------------------------------------------------------|
|                                                                                         |   |   |
| **PART I**                                                                                   |   | **FINANCIAL INFORMATION** |
| Item 1                                                                                       |   | Financial Statements |
|                                                                                         |   |      Consolidated Balance Sheets |
|                                                                                         |   |      Consolidated Statements of Operations |
|                                                                                         |   |      Consolidated Statements of Cash Flows |
|                                                                                         |   |      Notes to Financial Statements |
| Item 2                                                                                       |   | Management's Discussion and Analysis of Financial Condition and Results of Operations |
| Item 3                                                                                       |   | Controls and Procedures |
|                                                                                         |   |   |
| **PART II**                                                                                  |   | **OTHER INFORMATION** |
| Item 2                                                                                       |   | Changes in Securities and Use of Proceeds |
| Item 6                                                                                       |   | Exhibits and Reports on Form 8-K |
|                                                                                         |   |   |
| **SIGNATURES**                                                                               |

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**PART I         FINANCIAL INFORMATION**

**ITEM 1 - FINANCIAL STATEMENTS**

| **MAGIC MEDIA NETWORKS, INC.                 Consolidated Balance Sheets**                                                                                             |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                   |   | **January 31,                 2005****(unaudited)** |   | **October 31,                 2004** |
|                                                                                                                                                                   |   |  |  |  |
| ASSETS                                                                                                                                                                 |   |  |   |   |   |   |   |   |
|                                                                                                                                                                   |   |  |   |   |   |   |   |   |
| Current Assets:                                                                                                                                                        |   |  |   |   |   |   |   |   |
|    Cash and Cash Equivalents                                                                                                                            |   | $ | 329,228 |   |   | $ | 233,810 |   |
|                                                                                                                                                                   |   |  |  |   |   |   |  |   |
|       Total Current Assets                                                                                                               |   |  | 329,228 |   |   |   | 233,810 |   |
|                                                                                                                                                                   |   |  |   |   |   |   |   |   |
| Property and Equipment - Net                                                                                                                                           |   |  | 119,977 |   |   |   | 101,020 |   |
| Acquired Amortizable Intangible Assets                                                                                                                                 |   |  | 2,905 |   |   |   | 2,980 |   |
| Goodwill                                                                                                                                                               |   |  | 238,943 |   |   |   | 0 |   |
|                                                                                                                                                                   |   |  |  |   |   |   |  |   |
|       Total Assets                                                                                                                       |   | $ | 691,053 |   |   |   | $  337,810 |   |
|                                                                                                                                                                   |   |  |  |   |   |   |  |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                  |   |  |   |   |   |   |   |   |
|                                                                                                                                                                   |   |  |   |   |   |   |   |   |
| Current Liabilities:                                                                                                                                                   |   |  |   |   |   |   |   |   |
|    Accounts and Accrued Expenses Payable                                                                                                                     |   | $ | 218,850 |   |   |   | $  175,685 |   |
|    Payroll Taxes Payable                                                                                                                                |   |  | 108,120 |   |   |   | 98,747 |   |
|    Convertible Notes Payable - Related Party                                                                                                            |   |   | 200,000 |   |   |   | 325,000 |   |
|    Note Payable - La Jolla Cove Investors                                                                                                     |   |   | 300,000 |   |   |   | 300,000 |   |
|                                                                                                                                                                   |   |   |  |   |   |   |  |   |
|       Total Current Liabilities                                                                                                          |   |   | 826,970 |   |   |   | 899,432 |   |
|                                                                                                                                                                   |   |   |  |   |   |   |  |   |
|                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Stockholders' Deficit                                                                                                                                                  |   |   |   |   |   |   |   |   |
|    Preferred Stock, Series B Convertible ($0.0001 par value)                       3,750,000 Shares Authorized and Issued |   |   | 150,000 |   |   |   |        150,000 |   |
|    Common Stock                                                                                                                                         |   |   |   |   |   |   |   |   |
|       46,250,000 ($0.0001 par value) Shares Authorized                                                                                   |   |   |   |   |   |   |   |   |
|       31,390,412  Shares Issued (23,408,058 in 2004)                                                                                     |   |   | 4,160,288 |   |   |   | 3,282,177 |   |
|    Deficit Accumulated since Quasi-reorganization October 31, 1999                                                                                 |   |   | (4,354,538 | ) |   |   | (3,993,799 | ) |
|    Deferred Compensation                                                                                                                                     |   |   | (91,667 | ) |   |   | 0 |   |
|                                                                                                                                                                   |   |   |  |   |   |   |  |   |
|       Total Stockholders' Deficit                                                                                                        |   |   | (135,917 | ) |   |   | (561,622 | ) |
|                                                                                                                                                                   |   |   |  |   |   |   |  |   |
|       Total Liabilities and Stockholders' Deficit                                                                                        |   | $ | 691,053 |   |   | $ | 337,810 |   |
|                                                                                                                                                                   |   |   |  |   |   |   |  |   |
|                                                                                                                                                                   |
|                                                                                                                                                                        |  |  |  |  |  |  |  |  |  |  |

See Notes to Financial Statements         The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-1

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| **MAGIC MEDIA NETWORKS, INC.                 Consolidated Statements of Operations** |
|--------------------------------------------------------------------------------------|
|                                                                                 |   |   |
|                                                                                 |   | **Three Months Ended** |
|                                                                                 |   | **January 31,                 2005****(unaudited)** |   | **January 31,                 2004****(unaudited)** |
|                                                                                 |   |  |   |  |
| Net Sales                                                                            |   | $ | 2,300 |   |   | $ | 18,831 |   |
|                                                                                 |   |   |  |   |   |   |  |   |
| Selling, General and Administrative Expenses                                         |   |   | 351,789 |   |   |   | 322,068 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Interest Expense                                                                     |   |   | 11,250 |   |   |   | 9,415 |   |
|                                                                                 |   |   |  |   |   |   |  |   |
| Total Expenses                                                                       |   |   | 363,039 |   |   |   | 331,483 |   |
|                                                                                 |   |   |  |   |   |   |  |   |
| Net Loss before Income Taxes                                                         |   |   | (360,739 | ) |   |   | (312,652 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Income Tax Expense                                                                   |   |   | 0 |   |   |   | 0 |   |
|                                                                                 |   |   |  |   |   |   |  |   |
| Net Loss                                                                             |   | $ | (360,739 | ) |   | $ | (312,652 | ) |
|                                                                                 |   |   |  |   |   |   |  |   |
| Basic and Diluted Loss per Share                                                     |   | $ |  ( 0.01 | ) |   | $ | (0.02 | ) |
|                                                                                 |   |   |  |   |   |   |  |   |
| Weighted Average Common Share Equivalent Outstanding                                 |   |   | 29,629,094 |   |   |   | 20,681,837 |   |
|                                                                                 |   |   |  |   |   |   |  |   |

See Notes to Financial Statements.         The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-2

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| **MAGIC MEDIA NETWORKS, INC.                 Consolidated Statements of Cash Flows** |
|--------------------------------------------------------------------------------------|
|                                                                                 |   |   |
|                                                                                 |   | **Three Months Ended** |
|                                                                                 |   | **January 31,                 2005****(unaudited)** |   | **January 31,                 2004****(unaudited)** |
|                                                                                 |   |  |   |  |
| Operating Activities:                                                                |   |   |   |   |   |   |   |   |
| Net Loss                                                                             |   | $ | (360,739 | ) |   | $ | (312,652 | ) |
| Adjustments to Reconcile Net Loss to Cash:                                           |   |   |   |   |   |   |   |   |
| Non-Cash Expenses Included in Net Loss                                               |   |   |   |   |   |   |   |   |
|                                                                                 | Depreciation and Amortization |   |   | 5,575 |   |   |   | 3,000 |   |
|                                                                                 | Stock Issued for Services |   |   | 80,833 |   |   |   | 188,600 |   |
|                                                                                 | Extension of Stock Options for Consulting Services |   |   | 79,875 |   |   |   | 0 |   |
|                                                                                 | Increase in Payables and Accrued Expenses |   |   | 52,538 |   |   |   | 20,153 |   |
|                                                                                 |   |   |  |   |   |   |  |   |
| Cash Used by Operating Activities                                                    |   |   | (141,918 | ) |   |   | (100,899 | ) |
|                                                                                 |   |   |   |   |   |   |   |   |
| Financing Activities:                                                                |   |   |   |   |   |   |   |   |
|                                                                                 | Proceeds from the Issuance of Common Stock |   |   | 372,500 |   |   |   | 250,000 |   |
|                                                                                 | Proceeds Note Payable - Related Parties |   |   | 0 |   |   |   | 40,000 |   |
|                                                                                 |   |   |  |   |   |   |  |   |
| Cash Generated by Financing Activities                                               |   |   | 372,500 |   |   |   | 290,000 |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Investing Activities:                                                                |   |   |   |   |   |   |   |   |
|                                                                                 | Acquisition of Fixed Assets |   |   | (13,329 | ) |   |   | (16,143 | ) |
|                                                                                 | Acquisition of National Hotel Network |   |   | (100,000 | ) |   |   | 0 |   |
|                                                                                 | Acquisition of ALW Communications |   |   | (21,835 | ) |   |   | 0 |   |
|                                                                                 |   |   |  |   |   |   |  |   |
| Cash Used by Investing Activities                                                    |   |   | (135,164 | ) |   |   | (16,143 | ) |
|                                                                                 |   |   |  |   |   |   |  |   |
|                                                                                 |   |   |   |   |   |   |   |   |
| Increase (Decrease) in Cash                                                          |   |   | 95,418 |   |   |   | 172,958 |   |
| Cash and Cash Equivalents - Beginning                                                |   |   | 233,810 |   |   |   | 25,658 |   |
|                                                                                 |   |   |  |   |   |   |  |   |
| Cash and Cash Equivalents - Ending                                                   |   | $ | 329,228 |   |   | $ | 198,616 |   |
|                                                                                 |   |   |  |   |   |   |  |   |

See Notes to Financial Statements         The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-3

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**MAGIC MEDIA NETWORKS, INC.**         Notes to Interim Consolidated Financial Statements         January 31, 2005         (Unaudited)

**Note 1 -** **Basis of Presentation**

           The interim consolidated financial statements of Magic Media Networks, Inc. ("the Compay") include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading. The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and footnotes required by Generally Accepted Accounting Principles in the United States for complete financial statements. The financial statements presented herein have been prepared in accordance with the accounting policies described in the Company's October 31, 2004 Annual Report on Form 10-KSB and should be read in conjunction with the Notes to financial statements which appear in that report. The consolidated financial statements include the results of the Company's wholly-owned subsidiaries; Bar TV, Inc., Destination Television, Inc., and Hotel TV, Inc., which were incorporated in Florida in November 2002, August 2003, and November 2004, respectively. Also included, from the date of acquisition (December 31, 2004) are the results of ALW Communications, Inc. and National Hotel Television Network, Inc. All significant inter-company account balances and transactions between the Company and its subsidiaries have been eliminated in consolidation.

**Note 2 -****Notes Payable**

**            Convertible Notes Payable – Dr. Terry**

            On April 15, 2003, the Company issued to Dr. H. K. Terry a $100,000 unsecured promissory note originally due April 15, 2004, which has been extended to April 15, 2005. On October 12, 2003, the Company issued an additional one-year promissory note for up to $100,000 of which $60,000 had been advanced as of October 31, 2003 and an additional $40,000 was advanced on November 24, 2003. The maturity date of this note was extended to October 12, 2005. The notes are unsecured and bear interest at 6%. The notes, including any accrued interest, are convertible, at the holder's option, into common stock at the average closing price of the Company's common stock for the five trading days prior to the date of receipt of election to convert but not less than $0.05 per share. On October 13, 2004, Dr. Terry advanced the Company an additional $125,000 for which the Company issued a one-year promissory note that was convertible, at the holder's option, at $0.10 per share. The notes were issued to document Dr. Terry's loans to the Company. The proceeds of the loans were used for working capital. In January 2005, Dr. Terry exercised the right to convert the $125,000 note issued on October 13, 2004 into 1,250,000 shares of the Company's common stock.

**            Note Payable - La Jolla Cove Investors, Inc.**

            On October 23, 2003, as part of a legal settlement, the Company issued a $300,000 promissory note to La Jolla Cove Investors, Inc. The note has a maturity date of April 24, 2005; is non-convertible; and bears interest at 6-3/4% with all interest, including amounts previously accrued, to be paid at maturity. The new promissory note replaced a 7-3/4% convertible promissory note with a maturity date of September 24. 2004. The promissory note continues to be secured by a $300,000 real estate mortgage on the land and building owned by Dr. Harold Terry that houses the Company's offices.

**Note 3** - **Stockholders' Deficit**                     **Stock Issued for Cash**

            During the three months ended January 31, 2005, the Company issued 2,600,000 shares of restricted common stock to Dr. Terry for $260,000 or $0.10 per share as further described below - *Related Party Transactions.* The Company also issued 1,125,000 shares of common stock for $112,500 upon exercise of stock options which were granted in September 2003, as described below - *Common Sock Options and Warrants.*

**            Stock Issued for Services**

            During the three months ended January 31, 2005, the Company issued a total of 1,725,000 shares of common stock for services, consisting of 1,000,000 shares issued in connection with a new three-year employment agreement with the Company's President, Gordon Scott Venters, described below in *Note 4, Commitments, Employment Agreements*; 100,000 shares as directors' fees (50,000 to Mr. Venters and 50,000 to Mr. Nugent); 250,000 to Worldwide Financial Marketing Inc. for investor relations services; and 375,000 to various employees. The shares were valued at $172,500 or $0.10 per share which was representative of the approximate market value at the dates of issuance. None of these shares has been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

**            Acquisition of ALW Communications and National Hotel Television**

**              ** On December 31, 2004 the Company completed the acquisition of all of the issued and outstanding stock of National Hotel Network, Inc. ("NHN") and ALW Communications, Inc. ("ALW"). The purchase price of the transactions was $100,000 cash (for the stock of NHN) and 1,282,354 shares of the Company's common stock, valued at $128,235 (for the stock of ALW) for a total consideration of $228,235. The financial statements of the acquired companies, at the date of acquisition, reported total assets of the combined acquired companies, at December 31, 2004, of $12,693; total liabilities of $23,401; and shareholders' deficit of $10,708. The amount by which the purchase price exceeds the net assets of the acquired companies, $238,943, was recorded by the Company as *Goodwill,* and will subject to impairment review when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

**            Common****Stock Options and Warrants**

**            Consultants' Options**

**           ** In September 2003, the Company granted options to two individuals, pursuant to consulting agreements to purchase 3,208,334 and 3,208,333 shares of common stock, for a total of 6,416,667 shares. The options, with an original expiration date of March 5, 2004, gave the right to purchase shares of common stock at exercise prices of $0.10 to $0.25, or an average of $0.1558 per share. The number of shares of common stock to be received by each of the grantees was limited so that each would not beneficially own more than 10% of the then outstanding shares of common stock. In February and March 2004, options representing 4,166,667 underlying shares were exercised at $0.10 and $0.15 with proceeds to the Company of $500,000. Also in March, the expiration date of the remaining 2,250,000 unexercised options was extended to April 2, 2004 and again extended to June 30, 2004. At the time of the original extension, pursuant to the Black-Scholes valuation model, the options were deemed to have a fair value of $391,000, which was reflected as additional *Consulting Expense* of $391,000, and was reported in the Consolidated Statement of Operations for the three months ended April 30, 2004. On June 30, 2004, the expiration date of the remaining 2,250,000 options was further extended to September 30, 2004 and was again further extended to the date of partial exercise and subsequent re-pricing, January 5, 2005, at which date 1,125,000 options were exercised, in accordance with the modified exercise price of $0.10 per share, and the Company received $112,500. The term of the remaining 1,125,000 options was extended to March 31, 2005 and their fair value was recalculated, resulting in a charge of $79,875 to *Consulting Expense* in the quarter ended January 31, 2005. During the fiscal year ended October 31, 2004, an aggregate of $465,000 was recognized as fair value of the extended options and was charged to *Consulting Expense.*

            **La Jolla****Warrants*     ***

            In October 2003, La Jolla Cove Investors, Inc. entered into a two-year warrant agreement for the purchase of 10,000,000 shares of the Company's common stock, exercisable before October 22, 2005 at a price equal to the greater of (a) 85% of the average of the 5 lowest volume weighted average prices in the prior 20 trading days before the date of exercise, or (b) $0.25 per share.  Although the settling parties referred to this document as a "warrant", La Jolla agreed that (subject to the terms and conditions of such "warrant") La Jolla will exercise such "warrant" if and when (a) the market price of our common stock pursuant to the above formula equals $0.29 or more per share, (b) La Jolla's "piggy-back" rights have been declared "effective" by the S.E.C., and (c) in an amount at least equal to 10% of the volume of the common shares that trade at a price of $0.29 or more per share, excluding block trades of 50,000 shares or more. La Jolla was granted "piggy-back" rights for the above 10,000,000 shares on any Registration Statement that the Company files with the S.E.C. during a period of two years from the execution date of the Definitive Agreement. The number of shares of common stock to be received by La Jolla upon exercise of the warrants is limited so that La Jolla will not beneficially own more than 9.9% of the then outstanding shares of common stock.

**Note 4 -****Commitments**

**            Facilities**

            The Company leases from a stockholder, Dr. H. K. Terry, pursuant to an oral agreement on a month-to-month basis, an 8,500 square foot building in Fort Lauderdale, Florida, which serves as its administrative offices and computer operations center. The rent is $4,500 per month and the Company is responsible for utilities.

            **Employment Agreements**

            Gordon Scott Venters is employed as the Company's President and Chief Executive Officer, pursuant to an employment agreement, which began October 1, 1997 and provided for a base salary of $75,000, $100,000 and $133,000 for years one, two and three, respectively and which was renewed to October 31, 2004. On November 15, 2004, effective November 1, 2004, the employment agreement was extended until October 31, 2007, and provides for an annual salary of $133,000, which is the same as in previous years; annual increases of a minimum of 5%; and participation in incentive or bonus plans at the discretion of the Board of Directors. Mr. Venters also received 1,000,000 shares of the Company's common stock which are restricted as to transferability. The shares were valued at $100,000, ($0.10 per share), which was charged to *Deferred Compensation,* to be expensed over the 36-month term of the agreement at $2,778 per month.  The agreement additionally provides for certain confidentiality and non-competition provisions and a minimum payment of 18 months salary in the event of a change of control or termination "without cause," or if the employee terminates for "good reason."

**Note 5 - Related Party Transactions**

            Dr. Harold Terry, the owner of more than 25% of the Company's common stock, in January 2005, acquired 2,600,000 shares of common stock from the Company for cash consideration of $260,000. The shares, which are restricted as to transferability, were issued at $0.10 per share. Also, in January 2005, Dr. Terry converted the $125,000 convertible promissory note, which was issued in October 2004, in exchange for 1,250,000 shares of common stock. Dr. Terry, who assumed the Company's contractual obligation to acquire the building housing its office facilities for $480,000, has continued to lease the building to the Company, on a month-to-month basis, at $4,500 per month, which has been accrued by the Company but not paid. Dr. Terry has also consented to the use of the property as collateral for the $300,000 La Jolla promissory note. As of January 31, 2005 and October 31, 2004, the Company was indebted to Dr. Terry for accrued rent in the amounts of $112,500 and $99,000, respectively and for accrued interest on $200,000 of outstanding convertible promissory notes and on the $125,000 promissory note prior to being converted in January 2005, in the amounts of $18,735 and $15,547, respectively.

            Gordon Scott Venters, in November 2005, entered with the Company into a new three-year employment agreement, which is described above in *Note 4-Commitments-Employment Agreement.*

**Note 6 -****Ability to Continue as a Going Concern and Management Plan**

            The financial statements have been prepared assuming that the Company will continue as a going concern. The Company has had only nominal revenue in the ordinary course of its business. The lack of sales and recurring losses from operations raises substantial doubt about the Company's ability to continue as a going concern. Management's plan in regards to these matters is to seek further equity or debt funding to allow it to pursue its business plan which involves the sale of advertising on the Company's Bar TV, Gym TV and Hotel TV networks and the possible acquisition of companies in related or unrelated businesses. The Company intends to increase its revenues by concentrating its sales efforts on attracting national advertisers to its Gym TV network and its newly formed Hotel TV network; and to reduce its fixed cash operating expenses so that sales exceed the Company's fixed expenses.

**Note 7 - Subsequent Event**   

            In February 2005, the Company issued 300,000 shares of its common stock to Dr. Terry for $30,000. The shares are restricted as to transferability.

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**ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS****GENERAL**

          Magic Media Networks, Inc. ("we" or "the Company") is a media production and promotion company focused primarily on the television advertising industry. Our subsidiary, Destination Television Inc., provides access to our private television networks, Bar TVTM, Gym TVTM and Hotel TVTM that deliver national, regional, and local advertising content to high traffic leisure destinations.

          Our primary business is the production and distribution of television commercials designed to influence consumers' purchasing decisions. We provide proprietary advertising concepts, which we produce, as well as advertising content provided by our advertisers. Our digital networks allow for content to be specific for each targeted demographic group. We promote our networks as being able to increase exposure and brand recognition and strengthen the influence of consumer purchasing decisions, both at the point-of-purchase as well as at the retail level. Our digital technology and premium locations provide advertisers with instant delivery and flexibility of content that can be unique to each location, which allows our clients the ability to change their programming or select a specific location to target-market potential consumers. Our private television networks are not currently regulated by the FCC, which offers distribution opportunities to companies that are unable to advertise their products on conventional networks or cable television.

            Our revenue is derived from the production and sale of custom advertising and the subsequent airing of the ads on our Bar TV, Gym TV and Hotel TV networks. We offer leisure destinations, primarily bars, taverns and nightclubs, for Bar TV; and health clubs and gyms, for Gym TV; and hotels and resorts, for Hotel TV, a system consisting of hardware and software and if necessary, television monitors to distribute our programming.

            Our executive offices are located at 530 North Federal Highway, Fort Lauderdale, Florida 33301 and our telephone number is (954) 764-0579.

**            Strategy**

**           ** We have revised our business model to concentrate on the concept that "leisure destinations drive traffic to retail locations." We have developed relationships with leisure destinations such as bars, taverns, nightclubs, gyms, health clubs and most recently through acquisition, we now operate in hotels and resorts in desirable tourist areas.

**           ** We plan to limit our active solicitation of advertising customers for our Bar TV and Gym TV networks but will now concentrate on promotional events instead; whether it is, for example, the launch of a new alcoholic beverage that we can promote in our nightclubs or a new vitamin enriched health drink that can be sold in the gyms. In addition, we intend to derive the majority of our revenues with strategic alliances and agreements with retail locations whereby they pay a fee to be on our network and "pass- through" national advertisers that pay the retailer "slotting" fees or co-op fees.

            We also will direct our attention to obtaining our business through national and regional advertising agencies and promotion and public relation firms. We will attempt to be a venue of choice for major promotions, whether the ultimate sale takes place in the retail location that is part of our network or it brings the customer out of our leisure destination to a retail establishment off premises.

            We currently have a total of approximately 135 locations installed and broadcasting Bar TV on a daily basis. We have approximately 88 locations in Fort Lauderdale, West Palm Beach and the South Beach entertainment district in Miami Beach. We believe that this base of anchor locations has established our regional footprint in the Southeast Florida corridor, which covers the highly populated and affluent counties of Palm Beach, Broward and Miami-Dade. We also have approximately 37 locations in Central Florida (metropolitan Orlando and Tampa) and 10 in the Florida Keys. Approximately one-half of these locations are not actively engaged in our network and may be removed by us, may discontinue their association with Bar TV or may again become active participants.

            We believe that our business model can only be successful if we are able to attract national and major regional advertisers for major promotions. In order to accomplish this goal, we must continue to place our broadcast in high traffic locations in the entertainment districts throughout the United States. There is no assurance that we will able to enter into agreements with a sufficient number of business locations within the United States to interest the advertisers we are seeking.

            In order to interest viewers to watch our monitors and see and pay attention to our advertisements, we must provide entertaining content. We use the same approach as network television which provides content, which may be situation comedies, quiz, reality, talent or late-night talk shows to draw viewers and keep them entertained and focused on their television sets so that during the commercial breaks they watch the ads and eventually buy the products. Just as an "ads-only" channel has not proven to be popular, we believe that to be successful in presenting advertisements, we must provide some form of entertainment and we have chosen first-run motion picture trailers and music videos as our entertainment. We have not taken any surveys as to whether our locations' patrons like being exposed to ads or movie trailers.

           We utilize as "backbone" or "core" content, movie trailers of first-run motion pictures from the major motion picture studios, including Twentieth Century Fox, Columbia Pictures, MGM, Warner Bros., Paramount Pictures and Universal highlighting upcoming releases, and music videos. The movie trailers, which are rated as suitable for general audiences, are supplied to us, without charge, by Fahlgren Entertainment, Inc., an Atlanta based entertainment oriented advertising and public relations agency.  Fahlgren Entertainment, Inc. has agreements with the studios to receive print and ad ("P & A") marketing materials, which they provide to third-party entertainment companies such as our company to expand the "P & A" promotion of upcoming theatrical releases. The music videos, which are promotions for upcoming album releases, are provided to us by Elektra Music, which include videos by Warner, Atlantic Records and Elektra, and by Epitaph Records.

            We then schedule local, regional and national advertisements, before and after the filmed movie trailers.  Because music is generally played in our locations by disk jockeys or juke boxes, it is necessary that our broadcasts of movie trailers and music videos and ads be graphically intensive and without sound.

            We currently do not receive any direct revenues from these trailers and videos, but we are free to use them as content in our broadcasts to the locations that comprise our network. In exchange for allowing us to broadcast our ads and content to their location to be viewed by their patrons, we provide free advertisements, which includes producing a five-second static advertisement for the retail location utilizing its logo, address, website address and phone number. We also provide an "event calendar" with digital photographs of patrons and employees and allocate up to two minutes of airtime per hour of broadcast to their location.

            We maintain a similar relationship with our Gym TV locations, except that in addition to providing the businesses with free advertisements, we pay the locations, on a pro-rata basis, from 10% to 33% of the gross ad revenue. 

            **Industry Background**

            The point-of-purchase market with the out-of-home advertising business is currently estimated at $6 billion annually. The advertising industry is diverse and includes television, newspapers, magazines, radio, specialty media, the Internet, billboards, direct mail and telephone directories. Approximately $460 billion was spent on worldwide advertising in 2000, including over $240 billion in the United States alone.

            In recent years, non-traditional media, particularly digital technology, has brought in an era of change, providing advertisers new forms and formats by which they can connect with and impact their target audience.  Many industry analysts believe that the relative importance of traditional advertising media will decrease as advertisers look for more creative solutions to reach consumers.

            Through our networks, we have created advertising distribution channels that permit advertisers to effectively reach their audience in an out-of-home environment. We intend to capture an increasing share of the total advertising market. We believe that point-of-purchase advertising networks appeal to both traditional in-home and out-of-home advertisers who today employ a broad range of advertising mediums.

**            Network Program**

            Our "networks," which is the term we use to describe our groups of locations that permit their patrons to view our broadcasts, offer advertisers the ability to target specific demographics on a site-by-site basis. Placing monitors in high traffic leisure destinations such as sports bars, taverns, nightclubs, gyms and health clubs, increases exposure and ad impressions. The monitors are profiled based on specific characteristics of their audience, including age, gender, race and income. This is not accomplished scientifically, but by word-of-mouth and anecdotal observation, which we believe to be reliable. Some examples of the type of information which may be helpful for advertisers are the price of drinks in a bar, which gives information as to patrons' income; the breakdown by sexes, which might indicate the type of drink, which would appeal to a particular gender; the types of cars and trucks in the parking lot, are all items of information that may be useful to advertisers in determining the demographics make-up of the viewing population.  This information availability allows us to appeal to both local advertisers targeting a small geographic area within a major city, as well as national advertisers targeting a wide range of demographic groups.

            Our advertising monitor plays a repeating or looping sequence of advertising and programming.  As currently configured, a broadcast consists of 120 thirty-second advertising spots per hour.  The broadcast in each specific area can support 240 thirty-second airing slots, including entertainment spots, on the DVD installed at each location. New technology has been announced that may make available to us double-layered DVDs that can provide increased storage and broadcast availability. We intend to make use of this technology when it becomes available.

            Installation costs for a new site include the cost of acquiring hardware and the cost of installing equipment.  The fully installed average per site cost for a typical location with a single video monitor is approximately $600.  Some sites may contain multiple monitors. We secure three-year placement contracts for locations to install monitors.  There is no monthly recurring fee for the retail establishment that wants the monitors installed and we do not permit ads of competing bars and restaurants to be broadcast to the retail locations that form our network.  The retail establishment is responsible for supplying electricity to the equipment and keeping the monitor on, during normal business hours. As compensation for allowing us to place our monitors in their business location, which at present is generally a busy bar, tavern or nightclub, the retail establishment receives free advertising spots. We usually provide the business location with at least one minute of advertisements that air, without charge, at least twice per hour. The location may display, without charge, its monthly event calendar, five-second static ad and photo gallery that are all updated monthly at minimal cost to us.  

**            Advertising Sales**

            Our strategy is to derive a significant portion of our revenue from advertisements placed on our network.  We are attempting to procure national advertisers, primarily through advertising and promotion agencies and public relations firms that have the ability to direct promotion funds to our networks. Examples of products that are constantly having special promotions are automobile manufacturers and fashion firms. We are also seeking advertisers that are looking for alternate media to promote their products that are limited by law or tradition as to their advertising options. We also look for opportunities for advertisers whose products can be sold immediately on an impulse basis such as beverages in a Bar TV location and health foods and supplements in a Gym TV location.

           We believe that advertising and product demonstrations at the point-of-purchase could significantly influence which products consumers purchase. Advertising rates are based upon the availability of space for the desired location, the size and demographic make-up of the market served by the screens and the availability of alternative advertising media in the area.  Advertising sales are generally made pursuant to contracts with local, regional or national advertisers.

            As we grow, we intend to license territories to individuals or corporations to sell the local, regional and national advertisements for their territory. We intend to operate the new locations and network broadcast remotely utilizing a "media box" consisting of a digital and still camera shipped to the location to capture the necessary location content and shipped back for editing. We then intend to mail back the edited broadcast with the new ads on a monthly basis. We plan to compensate any necessary sales force with a base salary and an incentive plan if we are unable to license the territories. If we are unable to operate the new territories remotely, it could have a substantial and adverse impact on our expansion and capital plan.

**            Competition**

            Competition for advertisers is intense. We will be competing with similar networks and also with radio, television and cable companies and other forms of advertising including newspapers, magazines, the Internet, direct mail and billboards. We believe that our strategy of offering advertising in leisure destinations provides particular advertisers with access to a select clientele at attractive rates with favorable brand recall and significant point-of-purchase potential. We expect to compete with these forms of advertising on the basis of price and our ability to reach potential customers at the point of purchase. A large number of companies that provide advertising in the point-of-purchase segment of the advertising industry and other sectors have significantly greater financial, marketing, technical and other resources than we have. Potential competitors may be able to devote greater resources to marketing promotional campaigns, adopt more aggressive pricing policies and devote more resources to technology than we can. Increased competition may reduce our market share and may require us to reduce advertising rates and therefore lower our operating margins. We may not be able to compete successfully against current and future competitors. There can be no assurances that we will be able to obtain the desired results from our business strategy or to be profitable.

**            Gym TV**           

**           ** We plan to expand the Bar TV concept, which is directed at a specific demographic population focused on patrons of bars, taverns and nightclubs, to a concept focused on health club members, which will be part of our business unit, Destination Television. We believe that manufacturers and retailers that market health related products such as vitamins, health foods, bicycles, athletic equipment and sporting events will be anxious to direct part of their promotional budget to a specific sector of the population. We believe that the health club/gym market is well suited to our concept that "leisure destinations drive traffic to retail locations." 

            We completed the beta testing of our Gym TV network at locations with Gold's Gym franchisees in South Florida. We attended the National Fitness Trade Shows, and were able to execute new agreements for Gym TV locations in several additional states as part of our national roll out. We are now broadcasting to 33 locations and are awaiting installation of our equipment at an additional 33 facilities.

            In addition to having made application to register the trademark for Bar TVTM, we have made application to register the trademark of the Gym TVTM and Hotel TVTM brands with the United States Patent and Trademark Office under Section 038 of narrowcast media/audio in out-of- home (OOH) locations.

**            Acquisition of National Hotel Network and ALW Communications **

**           ** On December 31, 2004, we completed the acquisition of all of the issued and outstanding stock of National Hotel Network, Inc. ("NHN") and ALW Communications, Inc. ("ALW"). The combined purchase price of the transactions was $100,000 cash (for the stock of NHN) and 1,282,354 shares of our common stock (for the stock of ALW). We acquired NHN and ALW from Alec Lindenauer and Lou Wolfson, both of whom entered into employment agreements with Hotel TV, Inc., a wholly owned subsidiary of the Company on December 31, 2004.              

**           ** We plan to integrate the new acquisitions, which will be operated under the brand Hotel TV, Inc., with our existing operations, Bar TV and Gym TV so as to offer national advertisers an opportunity to reach a targeted audience at leisure destinations at relatively reasonable advertising rates.

**           ****Description of the Acquired Companies **

**           ** Founders Alec Lindenauer and Lou Wolfson established ALW Communications, Inc. in August 2002 and shortly thereafter, the concept for the City Traveler television program was introduced to South Florida's largest and most well known hotels. The show is an in-room television program designed to be a hotel guest's visual guide to the area. Each episode runs in a continuous loop on a dedicated channel, giving guests 24-hour access to an "insider's look" at the area's finest restaurants, attractions and shopping destinations. In May 2003, the show went live and now airs in 27 premier hotels in the Greater Miami and Fort Lauderdale areas. The City Traveler television show is currently offered at no cost to hotels and is broadcast from equipment installed in each hotel by independent contractors paid by ALW Communications, Inc. Hotels traditionally grant City Traveler exclusive broadcast rights for this type of programming.

**           ** Unlike traditional television shows with conventional commercials, City Traveler attracts advertisers by offering advertisements that are actual pieces of a television show. An Emmy award winning production staff works with each client to create a unique 60- to 120-second "advertorial" to entertain, educate and motivate targeted hotel guests. City Traveler episodes consist of 15-30 of these individual segments, each highlighting a specific destination.

**           ** In early 2004, in order to attract national advertisers, the National Hotel Network was formed as a sales organization to represent five companies (including ALW Communications, Inc.) that operate City Traveler-type channels in 11 U.S. cities. Through these local affiliates, the network has a viewer base in more than 470 hotels and 135,000 hotel rooms. Each affiliate independently produces their own travel show, however the National Hotel Television Network has contracts with each to sell customary 30, 60, and 90-second commercials. These contracts require that affiliates may not join a competing network, and that National Hotel Television Network not represent competitors airing programming in the affiliates' local markets.

**           ** We plan to use our capabilities both at Hotel TV and our other divisions to offer our services for producing commercials and other advertising materials. We expect to bill for these services separately from the sale of advertising time. Our production services will be offered to both advertisers and non-advertisers alike.

**            Government Regulation**

            Because we operate private networks at retail locations, we are not currently restricted by licensing program content and related regulations of the Federal Communications Commission.  In addition, the advertising industry is subject to regulation by the Federal Trade Commission, the Food and Drug Administration and other federal and state agencies and is reviewed by various civic groups and trade organizations.  The introduction of new laws, regulations or interpretation of existing regulations governing advertising could have a material adverse effect on our business.

**            Employees**                     We currently have five full-time employees and also employ eight independent commission sales representatives. We typically enter into independent contractor agreements or work-for-hire agreements with individuals to provide services on an as-needed basis.

            **Mergers and****Acquisitions**

            In addition to pursuing our revised business model, we are seeking to acquire companies or enter into joint ventures with companies that are in the advertising or promotion fields. We believe that our concept of leisure destinations driving traffic to retail locations is relevant to all forms of advertising, whether in digital or print or sound format. We believe that there are companies, in Florida and elsewhere that could benefit from our capabilities and industry relationships and that can also complement our existing network structure. In light of our limited cash position and relatively high debt load, there is no assurance that we will be able to complete the acquisition of any company.

**RESULTS OF OPERATIONS**

            The following critical accounting policies are important to the portrayal of our company's financial condition and results.

***Revenue Recognition:***

            All of our revenue is derived from the production and sale of custom advertising and its subsequent airing throughout our Bar TV network. Our primary obligations are to produce a completed video clip ("Production revenue") and to air that clip on our networks for an initial 90-day period ("Air Time revenue"). Production revenue is recognized upon the delivery and acceptance of the produced piece while Air Time revenue is recognized ratably over the 90-day period. Our advertising agreements provide one sum for both services. Management estimates the portion of the contract sum to be allocated to Production revenue based upon the projected production costs to be incurred. The remaining balance is allocated to Air Time revenue. Our network advertising medium is fairly unique and no statistics are currently available to support the nature and extent of our success in reaching a target market. We run produced spots at our own expense in order to generate the quantitative support necessary to eventually market this aspect of our business.

***Valuation of Long-Lived Assets:***

            We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

            We amortize the costs of other intangibles over their estimated useful lives unless such lives are deemed indefinite. Amortizable intangible assets are also tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested for impairment, at least annually, and written down to fair value as required.

*Results of operations for the Three Months Ending**January 31, 2005**and**January 31, 2004*

            The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and footnotes that appear elsewhere in this report.**Sales and Other Revenues**             In the three months ending January 31, 2005, we had incidental sales in the nominal amount of $2,300. This compares to the nominal sales of $18,831 in the three months ended January 31, 2004. Our sales in both periods were primarily of an experimental nature in which we tested and refined different concepts and approaches for potential advertisers. We do not expect any sum of revenues other than nominal amounts until we have in place a sufficient number of broadcast locations to attract national and regional advertisers.

**Expenses**                     Selling, general and administrative expenses for the fiscal quarter ended January 31, 2005 increased $29,721 or 9.2% to $351,789 from $322,068 in the fiscal three months ended January 31, 2004. Included in the increase was $79,875 of consulting expense in the 2005 quarter, which resulted from the calculation of the value attributed to the extension of the term of stock options, which were granted for consulting services. Also included in selling, general and administrative expenses was $80,833 for services paid for with our stock, which was a $107,767 decrease from the prior comparable 2004 fiscal quarter when services paid for with stock amounted to $188,700. Included in both periods were officer's salaries paid in cash of $33,000. With an increase of full-time employees, our non-officer payroll increased to $41,635.  Depreciation and amortization expense, for the fiscal 2005 quarter was $5,575, which was an increase of $2,575 over the $3,000 of depreciation and amortization expense in the 2004 fiscal quarter. The 86% change in depreciation and amortization resulted from a substantial increase of fixed assets.

            Interest expense increased $1,835 or 7% to $11,250 in the fiscal quarter ended January 31, 2005 from $9,415 in fiscal year 2004. The additional interest expense resulted from an increase in the average principal balance of outstanding convertible notes and an increase of accrued interest payable on payroll taxes.

**Income Tax Expense (Benefit)**

            We have substantial net operating loss carry-forwards, which may be used to offset operating profits in the future. In the periods covered by this report, there was no income tax expense or benefit reported on our financial statements. We determined that it was more likely than not that our net operating loss carry-forwards would not be utilized; therefore, we have provided a valuation allowance against the related deferred tax asset.

**Losses**

            Our net loss before taxes for the fiscal quarter ended January 31, 2005 increased $48,087 or 15.4% to $360,739 from $312,652 in the comparable fiscal 2004 quarter. This increase in the loss before taxes was the result of an increase of selling, general and administrative expenses of $29,721 and an increase of interest expense of $1,835, and a decrease of $16,531 in our nominal revenues.          

            Although we believe our revised business model may provide for an increase in revenue and a reduction in losses for the year ending October 31, 2005, there can be no assurance that we will achieve or maintain profitability or that revenues will be generated or that growth can be sustained in the future. The viability of our business plan necessitates that we significantly expand the number of locations that are part of our network to reach that level of critical mass of locations needed to attract advertisers. Without required funding, we will not be able to increase the number of locations and, consequently, we will be unable to secure the necessary advertisers.   **Loss per Share**

            The basic and diluted loss per share of common stock was $0.01 in the fiscal quarter ended January 31, 2005 compared to $0.02 in the fiscal 2004 quarter ended January 31, 2004, which was computed by dividing the net loss, by the weighted average common shares outstanding. In the fiscal 2005 quarter, the weighted average of outstanding common shares which includes the weighted average number of common shares into which the preferred stock is convertible was 29,629,094 compared to 20,681,837 in the fiscal year 2004 quarter. For the purpose of computing loss per share of common stock, the Preferred Stock is treated as if it were a separate class of common stock with rights and attributes identical to the common shares in all respects except voting rights.

**Impact of Inflation**                     It is management's opinion that inflation has had only a negligible effect on our operations in the past several years.**Liquidity and Capital Resources**                     We did not generate cash from operations in the period November 1, 1999 through January 31, 2005. Operating activities consumed cash of $141,918 in the fiscal quarter ended January 31, 2005 and $100,899 in the fiscal quarter ended January 31, 2004.                     We have been able to continue in business primarily from the receipt of cash from financing activities. During the fiscal quarter ended January 31, 2005, our financing activities provided total funds of $372,500. Similarly, our financing activities provided total funds of $290,000 in the January 31, 2004 fiscal quarter.

            Our liabilities, all of which are current liabilities, which are due in less than one year, were $826,970 at January 31, 2005. Of that amount, $300,000 was due La Jolla pursuant to a secured promissory note and $200,000 was due Dr. Terry pursuant to convertible notes. We also owed $112,500 of accrued rent and $18,735 of accrued interest to Dr. Terry. In addition, we owed $108,120 in payroll taxes. Since the end of the January 31, 2005 fiscal quarter, we raised $30,000 from the issuance of common stock. We have been keeping our payroll taxes current and are developing a plan to handle the past due liability.                     We have been funding our cash needs through the issuance of our common stock and convertible notes. We also used our common stock, in lieu of cash, to obtain professional and employment services. We intend to cover our cash needs over the next 12 months through the sale of additional shares of our common stock and/or convertible securities and the possible exercise of outstanding options and warrants. We have filed a Registration Statement under Form SB-2, which has been deemed effective by the SEC, for the sale by La Jolla of up to 10,000,000 shares of our common stock, which may be acquired upon exercise of the 10,000,000 common stock Warrants owned by them. The exercise of the Warrants is determined by a formula in the Warrant Agreement, which is based on the market price and trading volume of our common stock. Any proceeds from the exercise of the Warrants will be used to support our existing and proposed operations including the reduction of our liabilities.  There is no assurance that La Jolla will elect to or will be required to exercise any of their Warrants. There is also no guarantee, that we will be able to raise any additional funds from the sale of our securities or from borrowings or from any other source.

**Capital Expenditures**                     The only significant capital expenditure we expect to make in the upcoming year is for televisions to be placed in the various locations, primarily Gym TV locations that receive and transmit our programming and advertising.

**Ability to Continue as a Going Concern and Management Plan**

            Our financial statements have been prepared assuming that we will continue as a going concern. We have generated only nominal revenue in the ordinary course of our business. The lack of sales and recurring losses from operations raises substantial doubt about our ability to continue as a going concern. Our management's plan in regards to these matters is to seek further equity or debt funding to allow us to pursue our business plan which involves the sale of advertising on our Bar TV, Gym TV and Hotel TV networks and the possible acquisition of companies in related or unrelated businesses. We intend to increase our revenues by concentrating our sales efforts on attracting national advertisers to our Gym TV network and our newly formed Hotel TV network; and to reduce our fixed cash operating expenses so that sales exceed our fixed expenses.

**ITEM 3 - CONTROLS AND PROCEDURES**

            Within the 90 days prior to the filing date of this report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our principal executive officer who concluded that our disclosure controls and procedures are effective. There have been no significant changes in our internal controls or in other factors, which could significantly affect internal controls subsequent to the date we carried out our evaluation.

            Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer, to allow timely decisions regarding required disclosure.

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**PART II         OTHER INFORMATION**

**ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS**                     During the three months ended January 31, 2005, we issued the following securities:     

            In November 2004, we issued to our president, Gordon Scott Venters, 1,000,000 common shares, in accordance with the terms of an employment agreement entered into November 15, 2005, effective as of November 1, 2004. The shares, which are restricted as to transferability, were valued at $100,000, or $0.10 per share, which was representative of the market value at the date of issuance. The issuance was made in reliance on Section 4(2) of the Securities Act of 1933 and was made without general solicitation or advertising. Gordon Scott Venters by virtue of his position with the company is an "accredited" investor.

            Also in November 2004, we issued 50,000 common shares, valued at $5,000, to Gordon Scott Venters and 50,000 shares, valued at $5,000, to Todd Nugent for serving on our board of directors. The shares, which are restricted as to transferability, were valued at $0.10 per share, which was representative of the market value at the date of issuance. The issuances were made in reliance on Section 4(2) of the Securities Act of 1933 and were made without general solicitation or advertising. Messrs. Gordon Scott Venters and Todd Nugent, by virtue of their positions with the company are "accredited" investors.

            On December 31, 2004, we issued a total of 1,282,354 shares of our common stock in exchange for all of the outstanding shares of ALW Communications, Inc. Of these shares, 641,177 were issued to Alec Lindenauer and 641,177 were issued to Lou Wolfson. Messrs. Lindenauer and Wolfson are "sophisticated" investors and were the former owners of ALW Communications, Inc. and had access to all relevant information necessary to evaluate the investment and they represented to us that the securities were being acquired for investment purposes. The shares, which are restricted as to transferability, were valued at a total of $128,253, or $0.10 per share, which was representative of the market value at the date of issuance. The issuances were made in reliance upon Section 4(2) of the Securities Act of 1933, as amended, for an exemption from registration.

            In January 2005, we issued 100,000 restricted common stock, valued at $10,000, to R. Agudelo; 50,000 restricted common shares, valued at $5,000, to C. Holst; 50,000 restricted common shares, valued at $5,000, to A. Wilkes; 50,000 restricted common shares, valued at $5,000 to A. Nazem; 50,000 restricted common shares, valued at $5,000 to J. Niemeyer; and 75,000 restricted common shares, valued at $7,500, to M. Parks. The shares, which were issued for compensation for sales and office services, were valued at $0.10 per share, which was representative of the market value at the date of issuance. The issuances were made in reliance on Section 4(2) of the Securities Act of 1933 and were made without general solicitation or advertising. The recipients had access to all relevant information necessary to evaluate the investment and they represented to us that the securities were being acquired for investment purposes.

             Also in January 2005, we issued 250,000 shares of our restricted common stock, valued at $25,000, to Worldwide Financial Marketing for investor relations services. The shares were valued at $0.10 per share, which was representative of the market value at the date of issuance.  The issuance was made in reliance on Section 4(2) of the Securities Act of 1933 and was made without general solicitation or advertising. The purchaser is an "accredited" investor with access to all relevant information necessary to evaluate the investment and it represented to us that the securities were being acquired for investment purposes.

            Also in January 2005, we issued 2,600,000 shares of our restricted common stock to Dr. Harold K. Terry for $0.10 per share for a total of $260,000 which was used for working capital; and 1,250,000 shares upon his exercise of the $0.10 per share conversion feature of the $125,000 convertible promissory note which was issued in October 2004. The issuances to Dr. Terry were made in reliance on Section 4(2) of the Securities Act of 1933 and were made without general solicitation or advertising. The purchaser is a sophisticated "accredited" investor with access to all relevant information necessary to evaluate the investment and he represented to us that the securities were being acquired for investment purposes.

            As of January 31, 2005, we had 31,390,412 shares of common stock outstanding. As of the same date, we had 3,750,000 shares of Series B Preferred Stock outstanding.

**ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K**          

|   | (a)    |   | Exhibits

Exhibit 31.1 - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer

Exhibit 32.1 - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|   | (b)    |   | Reports on Form 8-K

            On November 18, 2004, we reported on Form 8-K, under Items 1.01, 3.02 and 9.01, regarding the three-year extension of the employment agreement with our president, and the issuance of stock pursuant to that agreement and the issuance of stock to directors as compensation for services.

          On January 6, 2005, we reported on Form 8-K, under Item 1.01, on the entering into the agreements for the acquisition of ALW Communications, Inc. and National Hotel TV Network, Inc.; under Item 2.01, on the completion of the acquisitions; under Item 3.02, on the issuance of stock in connection with the agreements; and under Item 9.01, we included unaudited financial statements for the companies acquired. This filing was amended on January 6, 2005 to include audited financial statements for the acquired companies. |

**SIGNATURES**

            In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|   |           |   |      | **MAGIC MEDIA NETWORKS, INC.**                                                                                                                                                                                                                                                          |
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|   |           |   |      |                                                                                                                                                                                                                                                                                    |
|   | March 21, 2005 |   | By:  | /s/ Gordon Scott Venters                                                                                                                                                                                                                                                                |
|   |           |   |      |                                                                                                                                                                                                                                                                                         |
|   |           |   |      | Gordon Scott Venters                 President and Chief Executive Officer                 (Principal Executive Officer) and                 Acting Chief Financial Officer                 (Principal Financial Officer and                 Principal Accounting Officer) and Director |